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Construction industry gears up for busy season: Alaska's contractors look forward to fourth straight year of prosperity.

The crystal ball used to make 2004's positive construction industry predictions, published in the January edition of Alaska Business Monthly, is proving to be very accurate. Many of Alaska's construction companies are savoring the prosperity for the fourth straight year.

According to Dick Cattanach, executive director for Associated General Contractors of Alaska, 2004 should be another excellent year for the industry.

"We are predicting construction volume this year to be about $5.3 billion, which is about 20 percent of the state's gross annual product of $28.5 billion," he said.

Home building in Alaska is still very good and should remain that way, at least as long as the interest rates remain low. According to the latest study by the U.S. Census Bureau, Alaska's home ownership rate has reached an all-time high.

While Alaska's home ownership rate has traditionally been lower than the rest of the nation, in 2003 that mark reached 70 percent. For the first time on record, Alaska was higher than the national rate of 68.3 percent, according to Dan Fauske, executive director of Alaska Housing Finance Corp., a state lending agency.

Between 1994 and 2003 the cost of a single-family home increased some 44 percent, from $145,321 to $209, 416, added Fauske, who says AHFC financed 37,957 homes between 1994 and 2003.

Rita Hamilton, president of Alaska Home Builders Association in Juneau, agrees that it is going to be a very busy season. And while Anchorage is leading the pack, followed by both Juneau and Fairbanks, Juneau and Anchorage are both closing in on the same brick wall.

"Both cities are about to run out of buildable land," Hamilton said. "The city and state own most of that land. In Juneau, the builders and the city are working together to try and find a way to release some of it.

"I know in Anchorage they're having an awful time; there are not lots to build on. It comes back to the 'NIMBY' or the not-in-my-backyard syndrome. Once some people get their house built, it seems like they don't want anyone to build around them; they want to keep development away from their homes."

The Mat-Su Valley is another place where there is excellent growth potential, and when the Knik Arm Bridge becomes a reality, major changes will take place. "I think the bridge will affect many things in Wasilla, not just construction," said Sandra Garley, Wasilla's city planner. "But it will depend on which plan they adopt.

"If the bridge is built using the current plan, there will be a major effect. That's because the road to and from the port, from the Mat-Su Borough, goes through Wasilla."

Garley went on to say that since the first of this year, 30 development permits have been issued. Eighteen of them were residential permits, 13 for single-family homes and two for subdivisions, which will add 61 new homes. There also was one permit for a 6,000-square-foot, multi-family complex with eight units.

Fairbanks, likewise, is expecting to have a busy season once the ground thaws enough for work to begin. Sasha Zemanek, executive officer for the Fairbanks chapter of Alaska Home Builders Association, says there should be 200 to 300 new homes completed there by fall.

"Construction is doing very well; it may be one of our best seasons," she said. "But, we have our problems, too. There's a shortage of building materials, and that will raise the cost of new homes."

The construction of new homes often leads to new neighborhoods and more families. With that, comes expansion of a city's infrastructure and construction of banks, department stores and even new car lots.

"Such is the case in Fairbanks," said Julie McCumby, at the Fairbanks Building Department. "This might be one of our busiest seasons on record."

She also said that Wal-Mart recently opened its doors. Other projects slated for this summer include a Fred Meyer Super Store, a First National Bank Alaska branch office and a new Lithia Chevrolet dealership.

Like Fairbanks, the Ma-Su Valley is having its share of commercial activity. While Palmer recently got a Fred Meyer, Wasilla is getting a Lowe's hardware store and industrial warehouse, according to Garley. The retail facility will be 135,000 square feet, plus a 31,000-square-foot garden center.

Other projects in Wasilla currently under way or soon to begin include a couple of hotels and a 16,700-square-foot addition to Spenard Builders Supply. Garley also said there have been permits issued for a 3,220-square-foot hanger for private and light commercial aircraft use at the Wasilla Airport. And in late March, Home Depot applied for a conditional use permit for a 104,000-squarefoot store, with an additional 18,000-square-foot garden center.

Builders in Juneau also are taking advantage of the summer season.

According to Chris Roust, a building official for the city, the Alaska State Employees Federal Credit Union will begin construction this month. The credit union will start on its new headquarters building in Juneau. He also said that Home Depot has received a conditional use permit, and an unnamed company has hired an engineering firm to do an evaluation-for-use on a former K-Mart building.

In Anchorage, major retail construction is not expected this summer, according to Neal Fried, labor economist for the Alaska Department of Labor and Workforce Development. He said that retail construction will be small, mostly privately owned commercial establishments. He said the two projects that might be considered exceptions are the expansion of REI on Northern Lights Boulevard and Bailey's new 120,000-square-foot furniture store, located at C Street and International Airport Road.

As for shopping malls, Fried added, "What we have seen is the reconfiguration of a couple malls in Anchorage. Let's see, there's been work on both the University Mall and the Northern Lights Mall, which went through a sort of a rebirth."

Other construction in the financial industry includes the five-story, 95,000-square-foot Centerpoint Financial Center. Owned by JL Properties, that building is scheduled to open in November. There also is the Credit Union 1 Headquarters on Abbott Road. Currently under construction, it will have five stories and provide 50,000 square feet of office space. KeyBank also will do a makeover on its Fifth Avenue branch.

Two other projects now under way include the Residential Mortgage Building, a three-story, 30,000-squarefoot structure located at 32nd Avenue and A Street, and the Alaska USA Financial Center at Eureka Street and 36th Avenue.

The Army Corps of Engineers, a valued segment of Alaska's economy and construction industry, also is having a busy year. This fiscal year, the Alaska District has one of the largest workloads in its history; it will top $660 million, according to information just released by its public affairs office.

Construction projects include the $178 million Bassett Army Replacement Hospital at Fort Wainwright, the Ground-Based Midcourse (missile) Defense project at Fort Greely and Eareckson Air Station.

Other construction jobs this summer include new barracks at Fort Richardson, family housing at Fort Wainwright, plus an airplane hangar at Elmendorf Air Force Base.

On the civil works side of their house, the Army Corps of Engineers also has summer projects that include improvements to the harbors at both Nome and Saint Paul, and they will be dredging the Anchorage Harbor.

Just like the Corps of Engineers, the state Department of Transportation plays a major role in the Alaska's prosperity and employment, in addition to the safety and welfare of its residents.

Go to any geographic region of the state and DOT will be working there. It could be anything from a $150,000 boat ramp on Prince of Wales Island to a $44 million interchange involving the Glenn and Parks highways near Anchorage.

Without a doubt, the biggest project this year in Anchorage, is the $85 million Concourse C at the Ted Stevens Anchorage International Airport. It is part of the six-year, $230 million airport renovation program, and at the time of publication, the concourse was scheduled to open this month.

Alaska's Central Region, which includes Anchorage, has about $270 million worth of construction work taking place this season, not including work at the Ted Stevens International Airport.

DOT workers in the Northern Region also will be busy with projects worth about $150 million this season. The largest will be in Barrow; it is a $25.4 million roadway and apron construction job.

Fairbanks International Airport also will have work done, which will include a new roof for the terminal and stage three of a $9.8 million drainage project.

Smaller airports in the region are not forgotten either. Kobuk, Deering, Emmonak, Koyukuk and Tetlin airports will divvy up nearly $40 million for summer projects.

Alaska's Southeast Region has 13 projects worth $57.8 million. Ketchikan will have the most expensive project. Phase two of its Third Avenue extension will total out at $16.6 million. The new ferry terminal mooring and building is the second-largest project. It comes in at $13.9 million, and Yakutat's airport is third with its improvements costing some $10.6 million.

Juneau will have two major projects, a ferry terminal stern berth, costing $5.5 million and Mendenhall Loop signal, which will cost $800,000.

Alaska Railroad also has a sizable to-do list this season. There are some 10 items, with a price tag totaling about $124.5 million, some of which will be spread over several years. That dollar amount does not reflect a cost for the North Ship Creek Rail Yard Expansion and Tideland Fill, in Anchorage.

The final tally for that railroad-funded project depends on the amount of salvageable material that can be obtained from the earlier phases and used for tideland fill and slope-stabilization.

Another high-cost, multi-year project is the Healy Canyon safety and reliability program.

ARRC is recommending a series of four projects, which includes two tunnels. The total cost of the foursome is about $74.1 million.

While Alaska Railroad is seeking federal funding assistance for the Healy Canyon project, company officials realize the importance of an ongoing, year-by-year stabilization program. So this year's work will cost about $8 million and focuses on slide-zone stabilization.

Fairbanks is also a site for a major $22 million ARRC project. It will consist of an intermodal facility and depot, featuring a state-of-the-art train depot, additional bus parking and safe transfer areas.

Construction for the school districts also is moving right along. And whoever said, "Education isn't cheap," probably spent some time in Alaska. The Anchorage School District, alone, has projects worth about $300 million that are either in the design phase or currently under construction, according to Ray Amsden, director of facilities for the Anchorage School District.

"The two biggest projects we have now," he said, "are the South Anchorage High School, which is scheduled to be completed this fall and the Eagle River High School, with a planned opening in fall 2005. Oh! And there's also the Wendler Middle School; it should also open this fall."

He went on to say that the South Anchorage High School is the most expensive construction job to be completed for the district this year. It was funded in 1999 and will cost $65 million. The Eagle River High School is scheduled to top out at $54 million.

Wendler Middle School, the least expensive of the three projects, will cost in the neighborhood of $28.5 million. Amsden says that this project is unique because, unlike the other two, which were paid for with municipal bonds, the middle school was funded with money from both bonds and a state grant.

Most people in Alaska's construction industry agree that it is a good year; they also say, you never know what the next year will bring. While the crystal ball used to make this year's predictions was very clear and accurate, hopefully, the one used for next season will be just as accurate-and just as lucky.
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Article Details
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Title Annotation:Building Alaska
Author:Martin, Gary L.
Publication:Alaska Business Monthly
Geographic Code:1U9AK
Date:May 1, 2004
Previous Article:SBA: help for Business: the Small Business Administration is committed to the development and the success of the small-business sector.
Next Article:Hotel construction continues during 2004: four new hotels are opening this year in Anchorage, and other construction is under way statewide as well.

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